The energy cost of mining cryptocurrencies is more than double that of extracting gold or copper

The amount of energy required to mine the equivalent of a dollar in Bitcoin is more than double the amount needed to extract the same value in gold, copper or platinum.

This has been revealed by a new paper by researchers at the Oak Ridge Institute, in Cincinnati, Ohio (United States), which has been published this week in the prestigious journal Nature Sustainability.

Scientists Max Krause and Thabet Tolaymat compared the average of four, five and seven megajoules (MJ) that consume copper, gold and platinum, respectively, with the approximately 17 MJ consumed by mining the equivalent of one dollar in Bitcoin.

The energy bill is also expensive with other cryptocurrencies, such as Ethereum and Litecoin, which consume 7 MJ per dollar, or Monero, which requires 14 MJ for 1 USD. However, all digital currencies analyzed obtained better results compared to aluminum, which requires 122 MJ to extract its equivalent to one dollar.

All cryptocurrencies are based on blockchain technology. To mine a digital currency like Bitcoin, the computer receives through a program a mathematical computational problem, called a block, that the machine must solve. In this way, you are “paid” with the cryptocurrency each time you throw the answer to a new problem. Therefore, the mining generates both a consumption of electricity and a use of the computer that solves the assigned equation.

The average energy cost of the mining of Bitcoin, Ethereum, Litecoin and Monero was calculated from January 1, 2016 to June 30, 2018. The authors of the paper highlight:

During this period, we estimate that the mining of the 4 cryptocurrencies was responsible for 3 to 15 million tons of CO2 emissions.

In May of this year, a study by financial economist and blockchain specialist Alex de Vries ensured that mining and the process associated with obtaining Bitcoin would consume 0.5 percent of world electricity by the end of 2018. Previous estimates indicated that, at the end of 2017, 0.13% of the world’s electricity was already destined for this activity, more than the electricity consumed by 159 countries around the world.